Austin will create a mini-bond program to raise $10 million to “purchase and preserve” live music venues, Mayor Steve Adler announced Thursday.
The city was one of five winners of a Neighborly Bonds Challenge, a program that asked for public agencies to give innovative proposals for investment in local projects. That program, whose winners were announced in Los Angeles as Adler spoke Thursday, will provide the city with about $100,000 of legal, administrative and marketing services for free.
That administrative support will let Austin create a program to crowdsource private investments to buy local music venues — a move Adler called “a creative solution for the creative class.”
The idea is to let local residents jump in to save the music venues they love. That might mean buying a venue outright that’s up for sale, or partnering with an existing owner to help keep a bar or concert hall operating as it always has.
“We are offering regular folks an investment vehicle to be part of the solution,” Adler said.
The expectation is that the investors would earn returns, like a typical investment, but the details of what level of credit it would involve will be worked out through the bond challenge’s legal and financial support, said Adler’s chief of staff, Lesley Varghese.
Austin applied for that challenge just last week. It might take a year to use the challenge’s resources to actually create the fund. Then, there could be another group or nonprofit formed to operate any venues purchased, Varghese said.
Adler emphasized that the program doesn’t depend on public money and won’t affect taxes. Instead, he said, it will let people not normally involved in bond offerings buy into a long-term investment on a smaller scale.
The mini-bond program is an early step in an initiative Adler has pushed over the last year to help both musicians and music venues survive Austin’s spiking cost of living.
Last year’s first-of-its-kind Austin Music Census indicated the “Live Music Capital of the World” was nearing a tipping point, with musicians and venue owners alike struggling to afford to live and do business in a city that is increasingly unaffordable for its creative class. That report included a survey of more than 100 venue owners and managers who said rising rents, razor-thin profit margins and declining cover charges were making it difficult to stay open.
In February, Austin Music People followed up with a report finding that Austin’s music industry has shed more than 1,200 jobs in just four years. Adler responded in June with the Music and Creative Ecosystem Omnibus plan, a kitchen sink proposal loaded with ideas on how the city can aid Austin’s music and cultural arts communities.
Adler noted Thursday that the city budget, approved this month, includes funding for some initial efforts: $200,000 toward creating a one-stop permitting center for music and arts venues, who have long complained the city’s process is too cumbersome; $200,000 for emergency funding to save arts venues; and $75,000 for job training for musicians.
The mayor also pointed to another effort underway: The city has asked the Urban Land Institute to evaluate options for preserving music venues along Red River Street.
“If we lose a place like Armadillo World Headquarters or Liberty Lunch, we lose a piece of our soul,” he said.
Austin artists had mixed reactions to Adler’s announcement. Nakia Reynoso, a musician and member of the Austin Music Commission, called the program “certainly a step in the right direction.”
“I’m happy to see so much of the work that’s been put in by many in the Austin music and arts community for many years begin to filter outside of commission meetings and into the real world,” he said.
Saxophonist Elias Haslanger raised concerns on Facebook.
“Although well intended, this raises some pretty serious questions,” he wrote. “Top of my mind: who exactly is going to determine which venues get purchased? The politics around this are going to be brutal.”
John Riedie, head of the Austin Creative Alliance, who last week led a march to protest the lack of affordable arts spaces, said he thought the bond model was a good one.
“But Austin’s losing more than live music venues,” he said. “I’d like to know if other creative sectors besides live music will be able to benefit from (the fund). I hope the arts don’t get left out.”